27 may 2013

[4C Note: The deeply disappointed tone of the following article from the Financial Times is surprising, considering the FT's editorial advocacy of strong action against climate change. The low price of Chinese solar panels may price some European manufacturers out of the market, but it will encourage a more rapid transition to renewable power.

Those opposing free import of the Chinese product complained that it would cost European manufacturing jobs, but suppliers and installers of solar panels have argued that excluding the panels by import duties would put at least as many Europeans out of work. The real beneficiaries of high duties on solar panels are the carbon energy suppliers of coal, oil and gas, at high cost to European consumers as well as to the climate and future generations.

Which raises the question of whose interests the European Commission is serving in this matter.

EU trade push against Chinese solar panels seriously weakened

By Joshua Chaffin in Brussels and Chris Bryant in Frankfurt The Financial Times, May 27, 2013

An aggressive EU attempt to combat unfair competition from China was seriously undermined on Monday when Germany led a majority of the bloc’s members to oppose punitive duties on imported Chinese solar panels.

Germany’s resistance to the case has undermined the position of Karel De Gucht, the trade commissioner, as he confronts Beijing in the EU’s biggest ever trade investigation.

Philipp Rösler, Germany’s economy minister, made clear his government’s opposition to duties at an official lunch in Berlin for Li Keqiang, the visiting Chinese premier.

Mr De Gucht, who is from Belgium, has recommended that provisional punitive tariffs averaging 47 per cent be imposed on Chinese-made solar products for dumping, or selling goods below cost.

The solar case has emerged as a test of whether the EU can maintain a unified trade policy, orchestrated by Brussels, to confront China; or whether national governments, under intense commercial lobbying by Beijing, would ultimately fracture.

Under EU rules, the commission has the authority to determine whether those provisional duties are enacted. But opposition from member states would weaken Mr De Gucht’s hand as the investigation moves toward a conclusion in December, when they can ultimately can block his proposal.

Member states were supposed to respond to the commissioner’s proposal by a Friday deadline. According to diplomats, trade officials and people involved in the case, at least 14 of the EU’s 27 governments have rejected duties, with some putting the number as high as 17.

Germany’s opposition is particularly significant since it is the bloc’s largest economy and its biggest trading partner with China. It is also noteworthy since it was a Bonn-based photovoltaics manufacturer, SolarWorld, that spearheaded the commission’s investigation.

A spokesperson said Mr De Gucht would “take note of the advisory positions of the member states” but added that duties may be necessary given the “life-threatening position” of the EU solar industry.

“Currently, 25,000 jobs are at risk in that sector within the EU. The commission is obliged to see the big picture and take decisions based solely on the evidence,” the spokesman said.

In what may reflect a softening of Brussels’ stance, the spokesman also indicated that the commission was open to a settlement, saying: “The commission will look at any proposal to be made after the imposition of provisional measures, if any. In this respect, the ball is very much in China’s court.”

In addition to the solar case, Mr De Gucht has also been sparring with Beijing over a separate anti-dumping and anti-subsidy investigation he has threatened to launch into China’s telecommunications network equipment suppliers, Huawei Technologies and ZTE Corp.

Mr De Gucht has won backing from the commission to open the probe, although he said he would hold off to make a last attempt at negotiating a settlement. He met with the vice-minister from China’s ministry of commerce, Zhong Shan, to discuss both cases on Monday.

Angela Merkel, the German chancellor, irritated EU trade officials in August when she publicly suggested during a Beijing visit that Mr De Gucht should avoid duties and instead negotiate a solution – a move that many in Brussels interpreted as undercutting the commissioner.

After a long period of quiet, the German government has restated that position in recent days.

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